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Dish must build 40% of its wireless network in 4 years, FCC says

The FCC said Dish Network must cover at least 40 percent of the population in areas covered by its spectrum with a wireless network in the next four years, or face penalties. Further, the FCC said Dish must cover at least 70 percent of that population within seven years. Dish has said it plans to build an LTE Advanced network with its spectrum.

Last week the FCC's five commissioners voted unanimously to approve Dish's plans to deploy a terrestrial network with its 40 MHz of MSS spectrum, which the FCC renamed AWS-4. Dish has been pushing for the ruling during the past year.

If Dish--or a future licensee of the AWS-4 spectrum--fails to hit the 40 percent mark in four years, it must hit the 70 percent coverage threshold in six, rather than seven years. Further, if Dish fails to hit the 70 percent mark in an any economic area as defined by the FCC, it will automatically lose its right to deploy service there.

A Dish spokesman declined to comment. Last week Dish said it after it more thoroughly reviewed the order and its technical details, "Dish will consider its strategic options and the optimal approach to put this spectrum to use for the benefit of consumers."

Another critical detail that emerged from the FCC order, released yesterday, was the power limits placed on a portion of Dish's uplink spectrum. Dish's 40 MHz of spectrum specifically runs from 2000-2020 MHz (for the uplink) and 2180-2200 MHz (for downlink). Dish had tussled extensively with Sprint Nextel (NYSE:S) about power limits and interference protections for the 1995-2000 MHz band, which is a portion of the PCS H Block (the other portion is 1915-1920 MHz). Congress has mandated the FCC auction the H Block of spectrum by February 2015, and FCC has indicated it will auction the spectrum next year. Sprint has said it wants to bid on it to use for LTE service.

In its order on the AWS-4 spectrum, the FCC said that it was imposing stronger interference protections for the 1995-200 MHz band, as well as reduced power limits for Dish's operations in the 2000-2005 MHz portion of the spectrum. The FCC rejected what Dish had proposed in terms of power levels and interference protections, and said that while this "may have a negative impact on the usability of a portion of the AWS-4 uplink band, this is more than offset by the public interest benefits of increasing the usability of the 1995-2000 MHz band." Essentially, the FCC said that the benefits of full, flexible use of the H Block outweigh Dish's arguments.

Dish has argued that the stronger power limitations and interference protections will render the 2000-2005 MHz portion of its uplink spectrum unusable, a position the FCC rejected. The FCC said Dish would still have more usable terrestrial spectrum than it otherwise had before. "Further, even if our actions do in fact create only 15 MHz of usable uplink for terrestrial use," the order "still creates a large increase in the overall utility of this spectrum. That is, 15 MHz of full usable terrestrial uplink can be put to more productive use than 20 megahertz of MSS/ATC uplink spectrum."

According to Credit Suisse analyst Stefan Anninger there are no restrictions on the transfer or sale of the AWS-4 spectrum, though the FCC would need to approve any sale. There are also no wholesale restrictions on the spectrum.

Meanwhile, the FCC also released its preliminary rules for the H Block auction. The rules are just preliminary and commenters will have until Feb. 6 to offer their feedback. The FCC said that an H Block licensee will be required to cover at least 40 percent of the population in its covered areas within four years and 70 percent at the end of the 10-year license term. The FCC would also allow a licensee to disaggregate, partition or lease the spectrum.

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